In Business This Week
... BUT DELL COMPUTER'S FOUNDERS
Another high-profile stock offering hasn't gone nearly as well. On Feb. 24, Dell Computer withdrew its long-planned secondary offering of 4 million shares of common stock, citing unfavorable market conditions. The company also said that it expects overall net margins to drop from historical levels of around 5% to about 4% for its current fiscal year. Immediately after the announcement, Goldman Sachs, the lead underwriter for the offering, dropped its "buy" rating on Dell, and the stock plunged 17%, to 30 1/8.
While tech stocks in general are out of favor on the Street these days, Dell is carrying an extra burden of negative publicity. Its foreign currency hedging practices are controversial. And the company said recently that its revenues for the fourth quarter, which ended in January, would be below analysts' glowing expectations.EDITED BY HARRIS COLLINGWOOD